Health plan could be bed case

The likelihood of Coalition or minority state governments being elected in NSW and Victoria is threatening $3.5 billion in extra hospital funding and forcing the federal government to consider a watered-down health reform without the largest states.

The Gillard government may have to concede defeat on national health reforms and focus instead on getting dissenting states to sign an agreement that would preserve their health arrangements but allow supporting states to receive the extra funding.

While still hopeful NSW and ­Victoria will agree to the reform plan, the federal government is running out of time to lock in an agreement.

Labor cleared one hurdle last night when the lower house passed draft laws to set up its health agreements with the states.

The opposition failed to secure support to delay the GST carve-up and potentially bring any new state Coalition governments into play. West Australian Liberal Premier Colin Barnett has already rejected the federal government’s deal.

The Victorian and NSW Coalition parties are threatening to withhold support for crucial tax changes.

Health Minister
Nicola Roxon
has warned that if an incoming state Liberal government in Victoria were to “tear up the deal’’, Victorian hospitals would miss out on extra beds.

The new regime for hospital funding, with the states handing over GST revenue in exchange for increased funding from Canberra, requires legislation to clear the Senate, and the states and territories involved to sign off on the tax arrangements.

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In Victoria, Opposition Leader
Ted Baillieu
, rated a chance to win Saturday’s state election, has refused to be bound by Premier
John Brumby
’s agreement on the health reforms.

In April, an initially reluctant Mr Brumby was finally persuaded by additional funding, including $402.4 million for sub-acute beds over four years – but Mr Baillieu wants more information.

“We don’t know the arrangements for the security of country hospitals, for the security of specialist hospitals, we don’t know the capital funding arrangements, we don’t know the boundaries between hospital funding and medicare funding, we don’t know the implications across the book," he said.

“The position we take is while some measures have been announced, there has been some additional beds and some additional money, that ought to be a base and in government we will look at it and we will address those issues and if we believe it is not in Victoria’s interests we will seek to renegotiate. But it has been signed, all we can do is seek to renegotiate," he said.

NSW opposition spokeswoman for health,
Jillian Skinner
, said there was no guarantee that a Coalition government in that state would agree to the proposed changes.

A Coalition government would “not sign off on a deal that leaves NSW in a worse financial position or compromises patient care".

The NSW opposition’s stance means it is important for the federal government to gain support for the required changes to the Inter-Governmental Agreement on the federal financial relations ahead of the March 26 state election. A spokesperson for NSW Premier
Kristina Keneally
said her department had provided comment on a draft agreement and was waiting to hear back from the commonwealth. The Gillard government is banking on public support – and the lure of new funding – to get the states to toe the line.

Steve Leeder from the School of Public Health at the University of Sydney, who chairs one of the 10 newly established councils that will oversee the area health networks required by the new regime, said it was uncertain if a minority government could deliver all aspects of the Council of Australian Governments agreement.

The government has already admitted it might not be able to get one of the key elements, a central pricing authority, in place before July. “Legislation trumps everything,’’ Professor Leeder said. “If the bills underpinning the changes don’t pass, the reform process will be set back quite considerably. I’d imagine that kind of instability could drain a bit of blood from the arm muscles of the states.’’